Behind the Numbers: How NRB directives promote interest rate hikes ?
Interest rates play a crucial role in the growth of the economy by influencing spending and investment. Lower interest rates encourage borrowing and consumption, whereas higher interest rates discourage both, thus playing a pivotal role in either boosting or slowing down the economy. Interest rates also affect inflation, currency exchange rates, direct resources and investment, and maintain financial stability. Overall, interest rates are powerful tools used by central banks to manage the economy and guide it toward desired outcomes. During periods of declining interest rates, everyone tends to think that everything is okay; however, there are some anomalies in the directives and regulations issued by NRB (Nepal Rastra Bank), the central banks that support higher deposit rates. Let's discuss this further . Does NRB regulation promote for BFI's interest rate hike? Currently, we are experiencing declining deposits rates offered by BFIs. However, we were experiencing opposite ...